Gov. Dannel P. Malloy said Friday his administration is delivering on a promise to procure clean energy at competitive prices as it announced deals with developers of a new wind farm in Maine and a solar project in eastern Connecticut.
The two projects will average under eight cents per kilowatt hour, a price the administration says is close to the cost of power generated from fossil fuel plants. It called the rates some of the lowest costs ever obtained for solar and wind power in the region.
“This is the most significant step Connecticut has ever taken to harness the power of clean energy and this announcement is truly a historic moment in Connecticut’s energy history,” Malloy said.
Malloy broke with some environmentalists during the past legislative session by supporting legislation that made price a bigger criteria in how Connecticut assesses renewable energy projects, but the announcement Friday was applauded by the environmental community.
“This is a good and big step toward where we need to go in Connecticut and regionally on clean energy,” said Chris Phelps, the state director of Environment Connecticut.
The response to the request for proposals shows that green energy can be competitive, he said.
“It’s wonderful, renewable energy becoming competitive with fossil fuels – and without price volatility,” said Roger Smith of Clean Water Action.
The price is locked in for 15 years, which should make the rates even more attractive if inflation drives up the costs of natural gas and oil, said Daniel C. Esty, the commissioner of energy and environmental protection.
The average price of all proposals that were submitted and ranked was 12.8 cents per kilowatt hour, with the high end of prices for projects submitted and ranked over 20 cents per kilowatt hour, according to Dennis Schain, a spokesman for the Department of Energy and Environmental Protection.
According to state officials, the price of the electricity produced by the projects was the most important criteria (80 percent), followed by its contribution toward improving reliability of the power grid (15 percent) and the feasibility of the proposals (5 percent).
Energy procurement is a complex, even esoteric, issue, but Malloy has signaled he believes it can be translated into a 2014 campaign issue issue by distilling his goals for energy to five words employed in speeches and in Friday’s announcement: “cheaper, cleaner and more reliable.”
Under state law, the winners were chosen by Esty after an interagency review. Many of the 47 bidders were from out of state, with several proposing wind power projects in Maine and New Hampshire.
- Number Nine Wind Farm, a 250 megawatt wind project to be built in Aroostook County, Maine. The developer is EDP Renewables North America LLC, which the state described as “an international leader in large-scale wind installations.”
- Fusion Solar Center, a 20 megawatt solar photovoltaic system to be built in Sprague and Lisbon on 145 acres primarily owned by the Connecticut-based Fusion Paperboard Co. The project developer is an out-of-state company, HelioSage Energy.
“The pricing offered by these projects demonstrates that Connecticut’s new approach to clean energy can spark innovation and competition among various technologies and drive down costs,” Esty said. “We had wind, solar, fuel cells, tidal and biomass all competing for the same long-term power contracts with the electric distribution companies – and the clear winners were Connecticut’s ratepayers.”
But, not necessarily, Connecticut developers.
A project in Montville heavily lobbied by local legislators and union officials did not make the cut. NRG Energy proposed converting a fossil-fuel plant to a biomass plant, which would generate power by burning wood harvested in Connecticut. The project also included a small solar array.
Economic impact was not a criteria for judging the proposals, said Katie Dykes, the deputy commissioner of DEEP.
“As much as I’d like to see local companies do the development work and the installations, this size project is limited to companies that have long experience in it,” said Michael Trahan, the executive director of an industry trade group, Solar Connecticut. “There are a handful of companies in Connecticut that play ball at that level and can get that sort of pricing and that sort of expertise.”
Trahan said he was encouraged by the administration’s push to develop solar and the results it obtained.
“These larger projects, they serve as examples, if duplicated in other places, how we might be able to drive the price of solar down to the point where it becomes a no-brainer for home and businesses to invest in,” Trahan said. “If it can be done once, it can be done twice.”
The 20 megawatt capacity of the solar project is small compared with the 250 megawatt wind farm, but it would rank as a major solar installation.
“That’s a lot of solar power,” Phelps said.
Smith said no local wind projects are possible until the state lifts a moratorium that’s been in place since 2011. The moratorium will expire once new siting regulations are on the books, but the legislature’s Regulations Review Committee has rejected proposed regulations three times. It goes to the committee again Tuesday.
“Hopefully this is the last time it goes to the committee,” Smith said. “The idea was to make sure the projects were done well, not to permanently obstruct wind here.”
DEEP did not provide a scoring sheet or other summary Friday of how the 47 proposals were evaluated.
The 47 proposals are posted on the DEEP website, but proprietary pricing information is redacted. Department officials said Friday that more information about the selection process will become public with its filing next week with the Public Utility Regulatory Authority.
DEEP advertised for proposals July 8 with a response deadline of Aug. 5, setting off a scramble by bidders to win contracts to provide electricity under the state’s recently revised Renewable Portfolio Standard.
NRG has tried unsuccessfully since 2008 to obtain a long-term contract that would allow the conversion of a portion of the Montville Power Station, a former coal plant that now burns oil and natural gas, to a wood-burning biomass project.
As a biomass plant, it would generate electricity full-time. The plant now only supplies power in times of peak demand, leaving it vulnerable to an eventual closure. The station employs 38 workers.
At the urging of area legislators, NRG has broadened its proposal beyond biomass to include solar arrays on the site and fuel cells. While some biomass plants burn construction debris, NRG would burn only salvaged timber, brush and other clean wood.
State officials said the two projects announced Friday will provide 3.5 percent of Connecticut’s total energy load and one-fifth of the state’s renewable energy goals By law, the state must obtain 20 percent of its electric needs from renewable sources by 2020.
The final choices were Esty’s, based on recommendations from a procurement team from DEEP’s Bureau of Energy and Technology Policy, and the offices of the Consumer Counsel and Attorney General.
Elin Swanson Katz, the consumer counsel, said she was pleased the review “was conducted with great attention to detail, a focus on fairness to all bidders, included solid analysis, and that professionals in my office were involved and informed at every step.”